As inheritance tax affects an increasing number of families, some people are turning to whole-of-life insurance policies as a way to help cover a future tax bill. These policies are designed to pay out on death and, when structured correctly, can provide beneficiaries with funds to meet an inheritance tax liability, helping to avoid the need to sell assets from the estate. The growing interest reflects concerns that frozen tax thresholds and rising asset values are bringing more estates into the inheritance tax net.
Our Founder, James Baxter says: “As inheritance tax affects an increasing number of families, some people are turning to whole-of-life insurance policies as a way to help cover a future tax bill. These policies are designed to pay out on death and, when structured correctly, can provide beneficiaries with funds to meet an inheritance tax liability, helping to avoid the need to sell assets from the estate. The growing interest reflects concerns that frozen tax thresholds and rising asset values are bringing more estates into the inheritance tax net”.
“While life insurance can play an important role in estate planning, it is not a straightforward solution. Premiums can be significant, and the long-term cost of the policy may exceed the eventual tax saving in some cases. As a result, life insurance is often most effective when considered as part of a wider inheritance tax strategy, alongside gifting, trusts and other estate-planning measures”.
Read the full article here: Money Week.